Hedge funds differ from mutual funds in terms of ______.

Question

Quizplus · Accepted Answer

Hedge funds and mutual funds differ in terms of transparency, investors, investment strategy, and liquidity. Hedge funds are typically less transparent than mutual funds, with limited reporting requirements and the ability to invest in a wide range of assets, including derivatives and alternative investments. Hedge funds often require larger minimum investments and are typically limited to accredited investors, while mutual funds are open to all investors. Hedge funds also have more flexibility in their investment strategies and can use leverage to enhance returns, while mutual funds typically focus on long-only investments. Finally, hedge funds can have higher liquidity risk, with lock-up periods and redemption restrictions.

Hedge Funds Differ from Mutual Funds in Terms of ______